If this is your first visit, be sure to
check out the FAQ by clicking the
link above. You will have to register
before you can post: click the register link above to proceed. To start viewing messages,
select the forum that you want to visit from the selection below.

Also, education is not zero sum. If you become more educated, it does not mean someone, somewhere must become less educated. Encouraging more people to pursue their education grows the pie of human capital. Encourage active investing doesn't grow the pie. If anything, some crumbs fall on the floor and get wasted. That's not to say that some people won't end up with bigger slices than average.

Active in what? Transactional activity? Or learning? I am always active, in learning but my stocks holding rarely change. I already spent the time to find them. I'll try to keep them as long as they're still profitable businesses. Most of my holdings were profitable businesses during the 08-09 financial melt down.

If you meant active in trading, then I agree day traders are profiting from other day traders. This case is zero sum game.
However, day traders can not profit from buy and holders. Buy and holders buy on fundamentals. So if day traders only hold the stock for a fraction of secs. They're not benefiting from the continue rise of business profit but buy and holders do. In this case, there's only opportunity cost.

Also, education is not zero sum. If you become more educated, it does not mean someone, somewhere must become less educated. Encouraging more people to pursue their education grows the pie of human capital.

Well, it is a zero/sum game in a way - because available productive jobs are limited.
While education (as in obtaining degrees and diplomas) may not be a zero/sum game per se, the number of available jobs provides an upper cap to validity of education.

In a perfect job market, more number of qualified job seekers (doctors, or whatever) ought to drive down the compensation in that profession.
But we don't have a perfect job market because of many reasons (professional societies, artificial barriers to entry, unions, etc.)

The result is a glut of taxi drivers with PhD.s and qualified doctors working as lab technicians.

In a free market, the cost of education should rise to price out the extra supply from the market.

Because of limited natural resources and GDP expansion constraints, pretty much any kind of labor or capital allocation is a zero/sum game.

Well, it is a zero/sum game in a way - because available productive jobs are limited.
While education (as in obtaining degrees and diplomas) may not be a zero/sum game per se, the number of available jobs provides an upper cap to validity of education.

In a perfect job market, more number of qualified job seekers (doctors, or whatever) ought to drive down the compensation in that profession.
But we don't have a perfect job market because of many reasons (professional societies, artificial barriers to entry, unions, etc.)

The result is a glut of taxi drivers with PhD.s and qualified doctors working as lab technicians.

In a free market, the cost of education should rise to price out the extra supply from the market.

Because of limited natural resources and GDP expansion constraints, pretty much any kind of labor or capital allocation is a zero/sum game.

The inherent inefficiency of the fund market works against it. When the market is buoyant and increasing, new money is flowing into the funds and they are under pressure to invest this money asap. When the market turn around into a decline, the investors demand redemptions, and the fund manager is forced to sell their holdings into a declining market in order to pay their investors money back.

Individual investors have no such constraints. They can buy stocks when their prices are declining. They can hold stocks during market troughs. They can cherry pick stocks rather than hold a broad base in a sector.

These differences give individual investors an inherent advantage. They also don't have any pressure to sell to new participants so their overheads might be lower.

These structural advantages can easily be blown by poor choices, hanging on to losers and a litany of other factors that they share with fund managers. YMMV
Keith

Anyhow, my point was about education, and why it is a zero/sum game in the context of the larger economy.
There is a social cost to education - both in terms of labor and capital.
Virtually every type of activity (even thenegotiator's horse racing, is an allocation of labor and capital.

When labor and capital is allocated to education, it is at the expense of other activities.
If such education does not produce productive jobs (i.e. causes under-employment or hidden unemployment), then it is not an efficient allocation of labor and capital.

Even if we assume that labor is conceptually unlimited, capital and other resources are limited.

"The material means of achieving ends are limited. We have been turned out of Paradise. We have neither eternal life nor unlimited means of gratification. Everywhere we turn, if we choose one thing we must relinquish others which, in different circumstances, we wish not to have relinquished. Scarcity of means to satisfy ends of varying importance is an almost ubiquitous condition of human behaviour"

Education is more about productivity than actual quantity of labour available. We've become progressively more productive over the past few centuries, and we don't see that showing up as higher unemployment, but rising incomes.

But it's the same thing with supply of labour. People use it as an argument against immigration. But when immigrants bring supply (labour), they also bring demand (food, housing, services, consumption goods).

For me, in the accumulation phase, it's not about potential that I could outperform the market; it's more about the risk of underperforming.

It's a risk I'm not willing to take. In some cases, investors are not rewarded by taking more risk. Long and steady wins the race.

I have picked stocks in the past (and still hold them) and learned a little luck was on my side. Right time and right place shall I say? I can't count on this going forward as a sensible retirement strategy. I don't know where individual stock prices will go, other than vaguely say "up" over a long period of time. Then again, they can also go bankrupt and decrease in price.

Remember a couple of bad stock picks can really screw up your % and since time and the markets move forward, you can't really go back to get the returns you underperformed.

1. day traders can not profit from buy and holders. Buy and holders buy on fundamentals.
2. So if day traders only hold the stock for a fraction of secs. They're not benefiting from the continue rise....

1. I agree x2!2. I do benefit, as profits made from trading same or other stock, go directly to the increase of long-term positions. Another words, most times, I do not trade {sell} to get rid of the stock, on the contrary, I'm increasing it as a result.

Short-term strategies play a key role as well, especially in times of high volatility.

But it's the same thing with supply of labour. People use it as an argument against immigration. But when immigrants bring supply (labour), they also bring demand (food, housing, services, consumption goods).

Yes, that is the lump of labor fallacy, but I am not saying that.
In aggregate, education is also a zero/sum game because having more of it means having less of something else.

If it were not so, there would be infinite expansion in productivity and GDP across the world.
Anything that requires allocation of labor and/or capital is a zero sum game.